If the operational challenges of 2020 proved a headache for many retail CEOs, it seems likely that 2021 will bring new ones. Faced with new consumer behaviours and technological transformations, Boards will have a great deal to consider and act upon. Of course, for the roadside retail industry, managing the disruption of electrification remains one of the biggest questions (but not the only one!) as they plan the right offline network for the future.
“Do they think it is a race?” a CEO in the global convenience and fuels industry remarked when he heard about the U.K. government’s new 2030 target. It certainly looks like governments see it this way globally. If so, Norway leads with its aspiration that by 2025, all new passenger cars shall be zero emission. By contrast China, the world’s leading EV market, has set the goal that by 2025, 1 in 5 of every vehicle sold will be electric. The country has put an extensive 260,000-station charging network in place.
Although doubters remain, there is no logical reason to think that significant government market interventions cannot achieve these targets. Norway did it. In 2011, only about 2% of new car sales were electric. Today, according to the Norwegian EV Association, 52% are EV and 20% PHEV, so it took Norway less than 10 years to go from close to zero to 72% of cars bought with a plug.
When the future of roadside retail is considered, the Norway experience is highly informative for markets like the U.K. On top of that learning, we need to layer in all the new lessons of the pandemic, many of them providing significant new opportunities for roadside retail. Drive-thru and the very latest new ideas from operators like EG Group provide one obvious indication of the future direction of travel.
Insight Research has spent time in Norway watching roadside retail adapt to EVs. Of course, some of the disruptions impacting the convenience retail market have themselves been disrupted due to the global pandemic with dramatic changes in consumer behaviour.
The work from home revolution has led to a major format location shift from city to urban and this, together with the flight from public transport, has probably extended the life of the petrol forecourt as (typically) 95% of populations live within 20 minutes of a filling station, and more people are using them for buying goods and services. However, rethinking that offer for new consumer needs is very important.
One of the key questions CEOs and senior directors are asking right now is how will this impact network planning? And, what are the latest learnings for operators on the viability of this business model?
As 2020 comes to an end it is clear that our industry has to build a better understanding of new measures that will become increasingly important to us. What type of trips are EVs used for, what about share of charging by location, the percentage who use fast charging, motivation, evaluation of fast charging experience, numbers of fast chargers, pricing systems and fuels sales trends? And, considering technology, delivery, curbside, safety and contactless—what are the site layout implications? How can retailers make drive-thru an integrated customer experience?